Wall Street set to slip after five-year high, before earnings

NEW YORK (Reuters) - Stocks were set to fall at the open on Monday as markets are seen consolidating after the S&P 500 closed Friday at a five-year high and before this week's start of earnings season.

Last week was the best for U.S. stocks in more than a year as a budget deal and economic data boosted investor confidence.

Investors will likely turn their attention to the fourth-quarter earnings season that kicks off this week. Earnings are expected to be only slightly better than the third-quarter's lackluster results and analysts' current estimates are down sharply from what they were in October.

"We have a cautious market entering fourth-quarter earnings season," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "I think it's going to be a disappointing one this time around."

Financial shares will be in focus a day after global regulators known as the Basel Committee gave banks four more years and greater flexibility to build up cash buffers, scaling back moves that aimed to help prevent another financial crisis.

By spurring credit, the easing of the bank rules may help support growth, potentially boosting investments in equities and other relatively risky assets.

"Basel giving banks four more years to get their act together will be good" for stocks, Cardillo said.

Separately, Bank of America shares added more than 2 percent before the market opened after it reached a settlement with Fannie Mae to resolve agency mortgage repurchase claims.

S&P 500 futures dipped 2.5 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 17 points, and Nasdaq 100 futures fell 4 points.

Walt Disney Co started an internal cost cutting review several weeks ago that may include layoffs at its studio and other units, three people with knowledge of the effort told Reuters.

Video-streaming service Netflix Inc said it will carry previous seasons of some popular shows produced by Time Warner's Warner Bros Television.

Major U.S. technology companies could miss estimates for fourth-quarter earnings as budget worries likely led some corporate clients to tighten their belts last month.

Amazon shares rose 1.8 percent $263.70 in premarket trading after Morgan Stanley raised its rating on the stock to "overweight" from "equal weight."

Roche's chairman was quoted saying the Swiss pharmaceutical group is no longer considering a bid for the U.S. gene-sequencing company Illumina . Illumina shares were off 8 percent at $50.20 in premarket trading.

(Reporting by Rodrigo Campos; Editing by Kenneth Barry)

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